SaaS – leveling the playing field?
In titling his memoirs “Who says elephants can’t dance?,” Lou Gerstner, IBM’s famed former CEO, played on the common belief that large companies are slow lumbering behemoths slowly walking across the savannah, as it were, easily overtaken by smaller more nimble competitors.
But is this always really true? Having worked for companies both large and small, I know that large companies often had more data about their operations and the business intelligence tools to drive efficiencies with dashboards of data delivered to top executives. In contrast, in the SMB companies I’ve worked at, I’ve had to photocopy key reports, stuff them into envelopes and hand deliver, yes hand deliver, them to each executive. The large companies I worked for had automated and web enabled their business processes. The smaller ones still had large filing cabinets with people faxing paper, making photocopies, and entering data into Excel spreadsheets – manual processes that not only slowed down all aspects of their business, but also denied executives of data that they needed to make better decisions. Sure they could make decisions faster than their counter parts at larger companies but with the paucity of data, were the small companies really making better decisions?
The difference, of course, was access to information technology. Large companies could afford it while smaller ones could not. For smaller companies, buying and deploying IT systems and software – e.g. ERP systems – that could make a difference was often cost prohibitive; not so for large companies. So is it any surprise that elephants can dance? Not really. These are elephants who used information technology as rocket propelled skates to help them speed across the savannah and win in business. How? By having the IT systems in place, large companies could, as a few examples, better their smaller rivals in driving cost and manufacturing efficiencies in their supply chains, managing their human talent, and ensuring that they had the information needed to drive sales and manage their customer relationships.
Now, however, we have Software as a Service (SaaS) – a new paradigm that democratizes access to information technology. Small companies are no longer locked out of information technology because of the large license fees for on premise installations. Instead they can access the same IT capabilities over the web using a low cost subscription model – leveling the competitive playing field.
The interesting question that arises is, “Now what?” If large companies lose one of the key advantages they have over smaller rivals and now can no longer count on having more efficient operations or greater business intelligence, will they return to being lumbering giants moving relatively slowly across the savannah? Will it mean that elephants won’t be able to dance anymore?